Check out the competition and figure out how your cupcakes will be different or better than theirs. Will they be cheaper? Moister? Tastier? You may want to choose a niche, like gluten free, organic or vegan cupcakes, or kids' birthday cupcakes for your business.

Decide whether to sell your cupcakes from your own store, deliver them to customers or sell them to middlemen like restaurants [source: Crawford].

Contact your local health department to find out if you need to be licensed and what regulations apply to a food-service business. Your state may require you to bake in a commercial kitchen, which means you'll have to rent one. The kitchen will have to be inspected before you can get a license. You may have to provide a standard recipe for your product labels. You may want to do this anyway, clearly stating what allergens your recipe contains or your equipment comes in contact with [sources: Hogan, Home Business Center].

Decide on your prices. Be sure to factor in the cost of supplies as well as rent (if you're renting a kitchen), utilities, salaries (if you're paying employees) and your own time and effort.

Get a website. This is especially important if you're exclusively taking orders.

Promote your business. Advertise and hand out business cards and other printed materials. Make use of social networking sites, like Facebook and Twitter. Offer special promotions, like a free cupcake for every dozen ordered. Hand out free samples outside your shop. (This may require a permit [source: Funcareers].) Donate cupcake baskets or gift certificates as prizes for charity events [source: Hogan].

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